And he said that, in the war on terror, more emphasis should be placed on the battle for hearts and minds in the Muslim world, rather than the military action which has dominated the joint US and UK response to September 11.

Mr Brown gave a strong hint that he would not support any increase in British troop numbers in Iraq if President George Bush announces a "surge" of as many as 20,000 US soldiers as expected next week.

UK personnel in the south of Iraq should continue their move away from combat and towards greater involvement in reconstruction operations and thousands of them can be expected to have left the country by the end of this year, he said.

Mr Brown's denunciation of Saddam's hanging puts additional pressure on Mr Blair, who has faced criticism - including from Labour MPs - for failing to make any public comment on the December 30 execution. The PM has said he will make his views known in the coming week.

Asked about the execution, the Chancellor told interviewer Andrew Marr: "Now that we know the full picture of what happened, we can sum this up as a deplorable set of events.

"It is something, of course, which the Iraqi Government has now expressed its anxiety and shame at.

"It has done nothing to lessen tensions between the Shia and Sunni communities.

"Even those people, unlike me, who are in favour of capital punishment found this completely unacceptable and I am pleased that there is now an inquiry into this and I hope lessons in this area will be learnt, as we learn other lessons about what has happened in Iraq."

Mr Brown's condemnation echoed the comments of Deputy Prime Minister John Prescott, who last week described the filming of Saddam's last moments as "deplorable" and said those responsible should be "ashamed".

Mr Marr asked Mr Brown whether he would commission an inquiry into the post-war handling of Iraq if he becomes Prime Minister as expected later this year.

He replied: "There will always be reviews into what happened. The lessons we have got to learn are two-fold.

"One is that in Iraq itself there is absolutely no doubt - and I think people will agree on this in time - that the passage of authority to the local population should have begun a lot earlier, so they had to take more responsibility for what was happening in their own country.

"I think, more generally, as far as the war on terror is concerned, the lesson I learned - and I think this is going to be of huge significance in the years to come - is that by military action and policing and intelligence and security work you can achieve a great deal, but we will not win against extreme terrorist activities and propaganda activities unless we have this battle for hearts and minds as well.

Cultural war

"That makes me think of the same cultural war that had to be fought against Communism in the 1940s and '50s onwards as, in a sense, the model for what we have got to do here."

He made clear he did not envisage any reinforcement of UK troops in Iraq in response to a "surge" in the US deployment.

Asked about Mr Bush's apparent plans to beef up the US military presence in the country, Mr Brown said: "What I can be sure about is that the policy we are pursuing in Basra and in the four provinces for which we have got responsibility - that policy will be the policy we are pursuing now.

"That policy is to continue to move troops from combat to training, to complete the redevelopment work - because that is the issue in this area, as in so much of Iraq, the reconstruction of Iraq.

"I am pleased that our armed forces are playing a part in that, so that we can over the next few months start to scale down our troops' presence in Iraq.

"I believe it is true to say that by the end of the year, there may be thousands less in Iraq than there are now."

Mr Brown acknowledged that he should bear a share of the responsibility for any flaws in the Government's policy towards Iraq.

"I take my full responsibility and I will not shirk it, as a member of the Government, for the decisions that were taken," he said.

"But I do say that there are lessons to be learnt, particularly from what happened immediately after Saddam Hussein fell."

"If the Deputy Prime Minister and the Chancellor now speak for the Government, what purpose is served by Mr Blair still being Prime Minister?"

Health Secretary Patricia Hewitt said the treatment of Saddam before his hanging was "very shocking".

She said the manner of his execution and the "horrifying" pictures emphasised how "right" Britain was to end capital punishment when MPs voted to abolish it in 1969.

She told Sky News: "Our Government made very clear to the Iraqi government our own views on capital punishment.

"That was made clear several months ago."

She added: "We have also welcomed the fact that the Iraqi government has instituted its own inquiry into this very shocking business of the way Saddam was treated before the actual execution and the business of the pictures."

She went on: "I have always been against capital punishment and the manner of his execution and those horrifying pictures I think should have reminded all of us how absolutely right we were in Britain to get rid of capital punishment.

"But Iraq is a democracy...and as we know not every democracy in the world has yet abolished capital punishment."